DATABASE MARKETING

2.4 database marketing –

Objectives, process of database
marketing, database for direct
marketing.

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DATA BASE MARKETING
Database marketing is a form of direct marketing using
databases of customers or potential customers to generate
personalized communications in order to promote a product
or service for marketing purposes.
The "database" is usually name, address, and transaction
history details from internal sales or delivery systems, or a
bought-in compiled "list" from another organization, which
has captured that information from its customers.
Ty p i c a l s o u r c e s o f c o m p i l e d l i s t s a r e c h a r i t y d o n a t i o n
forms, application forms for any free product or contest,
product warranty cards, subscription forms, and credit
application forms.
There are two main types of marketing databases,
1) consumer databases (B2C)
2) business databases (B2B)
 DATABASE MARKETING

• Database marketing can be defined as the

collection, analysis, and interpretation of
customer data in order to drive more relevant
customer experiences.
• Database marketing involves the collection of
data from a range of sources including customer
email correspondence, CRM system customer
info, data warehouses, and, increasingly, external
sources like social media.

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 ADVANTAGES OF DATABASE MARKETING
• Database marketing can be used for communications with current and
potential customers.
• With so much customer data – both internal and external – available to
companies, database marketing is becoming an increasingly important part of
the overall marketing strategy.
• The modern customer expects personalized and highly relevant
communications with your company and database suffice this requirement.
• It is vital that companies engage with customers about the issues most
pressing to their business which can be achieved by analyzing customer
databases .
• Database marketing techniques can inform companies of their customer
needs and can be the foundation on which to build successful marketing
campaigns.

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 DATABASE MARKETING EXAMPLES
LISTING: Relevant Communications: Customer Retention
Leveraging a range of Offers:
external data sources By developing a complete Database marketing can
like social media, customer profile, database
marketing enables help your company increase
company news alerts,
personnel changes, companies to deliver the their retention rates and
database marketers right message, at the right loyalty, by delivering the
can pinpoint the most time, to the right person. most personalized retention
suitable companies to By analyzing up real-time offers which take into
target for their next data sources like social account factors like digital
marketing campaign. media, database marketers behavior and online
Other data points can seize upon transactions as well as
including socio- opportunities as soon as socio-demographic and
demographic info, they arise and deliver the
product preferences, most intelligent and targeted location data.
and digital behavior marketing communications
can also be collected to both potential and
to create a complete existing customers.
view of your customer.

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 Process of Data Base Marketing
Objectives of Database Marketing

Internal sources Database for direct External Sources

marketing
Primary Survey

Determining Targets

Selection/ Execution
of Strategy
Feedback
Response of
Customers Feedback for
Optimization of
database
Calculating Customer
Life time Value

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OBJECTIVES OF DBM
• To maintain and build relationships with customers(
anniversary, birthdays, sending regular mailers – newsletter
• Inform new product launches , offers etc
• To remind and entice customers who have not visited the
store
• To get retain customers , acquire customers and get lost
customers due to competition.
• Service recovery
• Get feedback from customers – satisfaction levels ,
complaints

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 DATABASES FOR DIRECT MARKETING
1. Internal databases( used for formulation strategies to target the customers ,convert to buyers and ensure
customer loyalty-CRM ):
first time data collected at time of purchase
• Purchase , contact no ,Email id, address etc
• Those not doing Direct marketing can Collect through asking customers details like birthday, anniversaries , contact
no ,email id etc
• Feedback from store customers using loyalty cards
The data collected is grouped as per preferences and target them with relevant offers
2. External databases ( Used to reach and acquire new customer) : available data , collected through primary research,
from internet
Demographic data and psychographic data
Consumer data and their consumption habits so that targeted campaigns can be developed
DUN and BRADSTREET company provide DB for marketing purposes
3. Primary survey : Co generate their own lists ( customer interested in product and in receiving communications – can
be used for segmentation and target markets
They are done Retail outlets , metro station and events
Analytics CRM- Customer data help to strategize and plan their sales and marketing campaigns
Operational CRM –service request and orders data of customers are used to manage the daily operations of co

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 DETERMINING TARGETS
Determine the people who will be targeted from the available data by
segmenting the list
1. Preference of contact channel- how people wish to be contacted (
tele,mail,PS)
2. Type of Product required –what product is customer interested in out of
product mix of Co?
3. Type of Information required-what is the type of information people
require – about product launch, about promotional offer, news about Co .
Developments etc
4. Quantity and frequency of demand –frequency and quantity of purchase
to decide which customer to target first.
More than one segmentation can be used, based on objective of DBM to
maintain CRM …3…2...1….

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 RESPONSE OF THE CUSTOMER
Communication sent to customers then gauge their reactions
If customer happy – keep communications on
If customers unhappy – detrimental to keep communications on
If customer not interested in product they can opt out to not receive any further communications
Responses can be documented through customer life cycle journey .
Customer database from which customer receives
relationship messages

Not interested Prospects

customers (Targeted with Com.Strategies-DM,PS,)
Feed
Non Acquired Converted to customers back
prospects (targeted with Relationship messages)

Non Repeat/ defected Repeat/ Loyal customers

customers

Lapsed
customer
Lost Customers Customer
Base
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 CALCULATING CUSTOMER LIFE TIME VALUE
CLTV analysis done to see the present value of the customer for the Co

CLTV is the Present value of all the purchases the customer might make
during his life time minus the money the company is going to spend on
the customer for acquiring and retaining him
Co looks for Cost for acquiring Customer & Cost of providing services over
a period of time , retention rate of customer, rate of discounting

CLTV=∑Pi × net cash flow during period “i”

(i-r)i - Acquisition cost

i= is the period
r is the discounting rate

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